Applications for purchase loans last week dropped to their lowest level since December 2012, as the average rate on a 30-year fixed-rate mortgage slid marginally, the Mortgage Bankers Association reported.
“The latest dip in mortgage approvals offers further evidence of a moderation in the rate of the housing recovery,” Capital Economics said in a report on the data. “But if the wider economic recovery picks up speed next year as we expect, mortgage applications will follow.”
For the week ending Nov. 1, applications for purchase loans fell a seasonally adjusted 5 percent compared to a week earlier and were flat on an annual basis, according to the latest Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications survey.
During the same period, refinance applications fell 8 percent from a week earlier.
The drop in mortgage applications came as the average rate for a 30-year fixed-rate mortgage with a balance of $417,000 or less slid to 4.32 percent from 4.33 percent a week earlier.
“Continuing uncertainty about the debt ceiling and the outlook for monetary policy, as well as the softness of recent labor market data, help to explain the dip in mortgage demand,” the Capital Economics report said. “But the favorable fundamentals facing the market point to a gradual strengthening in mortgage approvals through the course of next year.”